Remission of CERB and EI‑ERB Debts

Summary#

The Canada Emergency Response Benefit and Employment Insurance Emergency Response Benefit Remission Order (made April 30, 2021, published May 12, 2021) cancels certain CERB and EI-ERB debts for some self‑employed people who applied using their gross self‑employment income. To qualify, affected people must have filed their 2019 and 2020 income tax returns by December 31, 2022; people who already repaid must make a written claim to get the money back.

What it does#

• Remits (forgives) overpayments of the Canada Emergency Response Benefit when the recipient would have been treated as eligible if their gross self‑employment income had been used instead of net income under the Canada Emergency Response Benefit Act.
• Remits overpayments or returned payments of the Employment Insurance Emergency Response Benefit when the recipient would have been treated as eligible if their gross self‑employment income had counted as insurable earnings under the Employment Insurance Act.
• Requires that the person has filed income tax returns for 2019 and 2020 with the Minister of National Revenue no later than December 31, 2022.
• If someone already repaid the benefit, remission is only granted after they make a written claim to the Minister of Employment and Social Development.
• The Order took effect on the day it was made (April 30, 2021).

Who's affected#

• Mainly self‑employed people who got the CERB or EI‑ERB after applying on the basis of gross self‑employment income, where:
  • their gross self‑employment income was at least $5,000, but
  • their net self‑employment income (or insurable earnings) was less than $5,000.
• The government estimated about 30,000 people could benefit, with an average of about $8,000 each and an estimated total cost of about $240 million. About 6,500 people who already repaid could be refunded, an estimated $52 million.
• People who do not file their 2019 and 2020 tax returns by December 31, 2022 are not eligible for the remission.

Why it matters#

• It prevents some self‑employed people from being forced to repay emergency support they accepted in good faith after unclear early guidance on whether “income” meant gross or net self‑employment income.
• It aims to reduce financial hardship caused by the pandemic for those who would have qualified under a gross‑income interpretation.
• It keeps recipients’ obligations to report and pay income tax on the benefits, but removes the debt collection threat for qualifying people or returns money to those who already repaid (if they claim it).